The FHA Mortgage program paved way to millions of individuals to achieve their dream home purchase by helping finance their starter home. First introduced in the year 1934, it has become a favorite home loan program of first-time homebuyers. For whatever reasons, a couple of myths and misconceptions surround this program.
If you’re shopping for a mortgage, it is essential to consider different mortgage types – including FHA Loans Fort Worth. Here are six common myths and misconceptions when it comes to FHA Loans and the truth behind them.
FHA Mortgage Is Only For First-Time Homebuyers.
It doesn’t matter you’re a first-time homebuyer or not – you can apply and get approved of an FHA mortgage provided you can meet your lender’s qualifications. It is important to note that most FHA loan borrowers tend to be first-time homebuyers since the minimum down payment requirement is attractive to people with a limited budget.
Only Individuals With Poor Credit Can Enjoy FHA Loans.
It is true that lenders are more forgiving when it comes to FHA loan credit score requirements, but that doesn’t mean people with good FICO score can’t take advantage of it. If you want competitive rates and low down payment offered by FHA mortgage, you can apply for this home loan and use this to buy your house.
You Should Go for Conventional Loans Instead If Your Bank Won’t Process FHA Mortgage.
Banks are not the only ones that approve you of an FHA loan. Lots of other lenders are willing to write you an FHA mortgage. If your bank or current lender refuses to approve your FHA mortgage application, you can always shop for other lenders.
Good Read: Advantages and Disadvantages: Conventional vs. FHA Loans
The Federal Housing Administration Will Lend You The Funds To Buy A House.
The government agency FHA is not your lender. What they do is they are the ones to insure the loan. This is to minimize the financial risk that comes with mortgage lenders approving your FHA loan. Since FHA loan lenders will take as low as 3.5% down payment, there will be an FHA Mortgage Insurance you will have to pay.
One Can Buy Any House You Want With An FHA Mortgage.
You can buy a property you want with an FHA loan – provided it will pass the property requirements set by the US Housing and Urban Development. It needs to be your primary residence, an HUD-approved home appraiser will inspect and appraise the property, and it needs to pass the inspection and appraisal.
You Can Only Use An FHA Loan To Buy A House.
On the contrary, FHA mortgage is not only for home purchases. You can also use an FHA home loan to fund home improvement projects. The kind of FHA loan that can help finance home improvement projects is a 203K Improvement Loans. You can get up to $25,000 to improve your home.
Good Read: The FHA 203(k) Loan: A Home Repair Loan And Mortgage All In One
Remember the truths behind these six myths and misconceptions when applying for an FHA mortgage. Use them to your advantage. You’ll find better ways on how to get approved for an FHA home loan with your knowledge.